The book has two primary settings: Kansas around 1900, and the Land of Oz. Farming was a huge part of Kansas's economy in the latter part of the 19th century, but farmers were struggling. Many farmers (including Black farmers who left the South after the Civil War) had relocated there to make a life. The land was fertile, but weather made it very challenging to keep crops alive year after year. Tornadoes, such as the one that transports Dorothy to Oz, were commonplace. Floods and drought both wreaked havoc on the crops, as did extreme winter weather. Bugs, too, threatened the farmers' livelihood. What crops did survive were exported far and wide. Unregulated prices across the world meant that farmers could not make reliable financial plans.
The abandoned construction of the railroad also led to an abundance of ghost towns, which increased the sense that people were coming to Kansas and leaving because it turned out to be too difficult to live there. Baum describes Aunt Em and Uncle Henry as tired, and he emphasizes Aunt Em's wonder at Dorothy's ability to remain happy on the dusty plains of Kansas. Baum does not directly address the political and economic context in which the novel is set. Still, he heavily implies that Aunt Em and Uncle Henry are worn out from the hardship many Kansan farmers were enduring at this time.
In the 1890s, in response to all these pressures, many Kansan farmers joined the Populist party. This left-wing political party represented the interests of small farmers and stood for economic regulations that would make it easier for them to make a dependable income. Laborers in other sectors joined as well, as it became clear that the party aimed to curb monopolies and corporate power. The movement did not last long, but it was an important precursor to the 20th-century labor movement. Baum insisted that The Wizard of Oz was a "simple" children's story that did not have anything to do with politics, but there are ways in which the Land of Oz reflects a world undergoing a Populist revolution. For instance, the Emerald City is a display of opulence, but Dorothy and her friends learn that the Wizard is forcing everyone to wear glasses that make it look far more impressive than it is. Once the glasses come off, people realize that the Wizard of Oz is a con man. The book is sympathetic to him as a person, but it suggests that "all-powerful" leaders often do not have the answers they claim to have. Rather, as Dorothy and her friends learn, the people have the power to help themselves if only they band together.
